(WFRV) – A minority owner and CEO/CFO of a recycling company was sentenced to over two years in prison for failing to pay a significant amount of money in employment taxes to the Internal Revenue Service.
61-year-old Kevin Shibilski from Merrill was sentenced to 33 months in federal prison, followed by three years of supervised release for failing to pay $858,101 in employment taxes to the IRS for tax years 2014-2016.
On May 16, 2022, Shibilski pleaded guilty to failing to pay employment taxes to the IRS from Pure Extractions Inc. and Wisconsin Logistics Solutions LLC.
According to a release, Shibilski was a minority owner and CEO/CFO of 5R Processors (5R), which had locations in Ladysmith, Catawba, Glen Flora, Wisconsin, and Morristown, Tennessee. 5R was involved in the recycling of electronic equipment and other assets.
Pure Extractions Inc. was created by Shibilski in June of 2014 to handle 5R’s recycling operations and took on all of 5R’s recycling customers, warehouses, and equipment, income flows from recycling, most of 5R’s recycling employees, but none of 5R’s debts.
Wisconsin Logistics Solutions LLC was also created by Shibilski in February 2015 to handle 5R’s trucking and logistics operations. Wisconsin Logistics took on most of 5R’s trucks and equipment, drivers, dispatchers, pick-up routes, licenses, and all of 5R’s income flows from trucking and logistics, but again, none of 5R’s debts.
At the sentencing, the judge found that the government presented overwhelming evidence showing that Shibilski had been in charge of 5R’s operations and finances since March of 2013 and had been the primary decisionmaker on which bills to pay and not to pay.
The judge noted that Shibilski had not sincerely accepted responsibility for his actions, noting that he kemp blaming everybody else, including the IRS, his co-defendants, and other 5R employees, for not paying employment taxes.
In addition, the judge noted that imprisonment was necessary in this case to send a deterrence message to two groups. One, business owners who willfully fail to pay their employment taxes and need to know their actions will have consequences. Two, the general public who needs to know that prison is not just for the impoverished or drug dealers.
As part of his plea agreement, Shibilski agreed to pay toward the remediation of the leaded glass storage sites for 5R in Wisconsin and Tennessee. He will be paying $100,000 to the Wisconsin Department of Natural Resources.
Shibilski’s co-defendant, Bonnie Dennee, pleaded guilty to conspiracy to defraud the United States, relating to 5R’s illegal storage of leaded glass. She was sentenced to five months in prison back in January 2021.
James Moss, another co-defendant of Shibilski’s, pleaded guilty to conspiracy to defraud the United States relating to 5R’s illegal storage of leaded glass, as well as a conspiracy involving the failure to pay over 5R’s employment taxes. He was sentenced to 18 months in prison.
The charges against Shibilski, Moss, and Dennee were the result of an investigation conducted by the Wisconsin Department of Natural Resources, the Bureau of Law Enforcement, the United States Environmental Protection Agency, the Criminal Investigation Division, and the IRS Criminal Investigation.